What is weekly premium insurance?
A financial protection known as weekly premium insurance pays the insured weekly premium payments in exchange for coverage.
Prudential first offered this kind of insurance in 1875, and it was widely available in the late 1800s and early 1900s. At the time, insurers could not attract customers by offering insurance with monthly premium payments. The low weekly premium payments were intended to align with workers’ modest wages and pay schedules. Industrial life insurance is another name for weekly premium insurance.
How Weekly Premium Insurance Works
One aspect of industrial insurance, life insurance available to those working in industrial occupations like manufacturing, was weekly premiums. Insurance firms sent representatives to people’s homes to collect premium payments. Since bigger and less frequent premium payments were more accessible for many families due to growing salaries, the number of excellent weekly insurance plans started to fall in the mid-1900s.
Defending America
In the past, insurance was often sold rather than purchased, which was convenient for insurance firms. Adverse selection is the theory that underlies this way of thinking. It’s the theory that those looking for insurance are more likely to require or use it, making them more vulnerable to danger. That being the case, insurers sent legions of salespeople to persuade customers that purchasing insurance was a wise decision.
Most of the weekly plans from the past were for life insurance. The cost of the projects was reduced since the insurers could collect money more quickly with weekly premiums. Employees were pitched the notion of paying a few dollars per week for a coverage amount of, say, $2,000 in the event of their death or twice that amount in the event of an accident—a concept known as double indemnity. Naturally, the insurance guy would visit the policyholder’s home or place of work on payday to get the premium.
One of these policies’ main selling points, which remains so today, was building monetary value. After 20 or 30 years of payments, the insurance had accrued a cash value, often equivalent to the face value of the policy or the premiums paid. Individuals might also take out loans in violation of the rules.
This was also how disability insurance was marketed even before Social Security began to provide disability benefits in 1956. Before that time, the typical worker had few options for support if an accident sustained at work prevented them from continuing their employment.
It’s difficult for people to imagine a world where employees’ only advantage was their income; there needed to be government safety nets or retirement benefits.
Conclusion
- Before the existence of monthly insurance plans, weekly premium insurance dates back to the late 1800s.
- Because the premium payments matched the pay schedules of the insured, weekly premium insurance was typical back then.
- The mid-1900s saw an increase in salaries, which led to a fall in weekly premium insurance plans as monthly insurance policies became popular.
